MGMT 200 EXAM 1 (PURDUE UNIVERSITY) NEWEST
2024 EXAM 1 AND PRACTICE EXAM 250 QUESTIONS
AND CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+
Accounting is a system of maintaining records of a company's operations and
communication that information to decision makers. - ANSWER: True
What makes accounting a valuable discipline? - ANSWER: Provides information to
make decisions
Financial accounting does not deal with which of the following? - ANSWER: Providing
information to internal users
Which of the following groups is not among the external users for whom financial
statements are prepared? - ANSWER: Managers
Product profitability reports for a business are considered - ANSWER: Managerial
accounting
Preparing a budget for a business is considered - ANSWER: Managerial accounting
(Budgets are internal documents and generally not shared outside of the
organization)
Which of the following would NOT be an objective of external users reading a
company's financial statements? - ANSWER: Assessing the company's contribution to
social politics.
What is the primary purpose of financial accounting? - ANSWER: Measure business
activities and communicate those measures to external users to make decisions.
When a company receives a product previously ordered, a recordable accounting
transaction has occurred - ANSWER: Yes (affects financial position and can be
measured in money)
When a company inquires about the availability of inventory, a transaction has
occurred - ANSWER: No
When payment is received for services not yet rendered, no entry is recorded until
that service has been rendered. - ANSWER: False (affects financial position since cash
is received)
Which of the following business events is not a transaction recorded in financial
accounting? - ANSWER: Signing an agreement with a supplier
, An alternative form of the accounting equation is: - ANSWER: Assets - Liabilities =
Stockholders' Equity
The resources of a company are referred to as: - ANSWER: Assets (assets benefit
future operations. Examples are cash, inventory, supplies, accounts receivable,
buildings and equipment.)
Liabilities can be best described as: - ANSWER: The amount owed to creditors
What is the best definition of an asset? - ANSWER: Resources that benefit future
operations
What is the best definition of an accounts receivable? - ANSWER: Amounts owed by
customers to a company.
Those who lend money or deliver goods and services before being paid are called -
ANSWER: Creditors (Assets = Liabilities( creditors' claims) + Equity (owners' claims))
If total assets increase $30,000 during a period and total liabilities increased $12,000
during the same period, the amount and direction (increase or decrease) of the
change in stockholders' equity for that period is: - ANSWER: an $18,000 increase.
assets = liabilities + equity
(+$30,000) - (+$12,000) = x
(+$30,000) - (+$12,000) = (+$18,000)
At the end of its year, J&L Services, Inc., a computer services business, had total
assets of $25,000 and equity of $10,000. How much were J&L Services' liabilities? -
ANSWER: $15,000
assets - equity = liabilities
$25,000 - $10,000 = $15,000
The amounts recorded when the company sells products or provided services to
customers are referred to as: - ANSWER: Revenues (revenues are recorded at the
time the company provides products or services to customers)
Which of the following best describes revenue? - ANSWER: Sales of goods and
services to a customer
The cost associated with producing revenues are referred to as: - ANSWER: Expenses
Dividends represent a return of the company's profit to its owners, the stockholders.
- ANSWER: True (not classified as an "expense")
Which of the following items is not a specific account in a company's accounting
records? - ANSWER: Income
2024 EXAM 1 AND PRACTICE EXAM 250 QUESTIONS
AND CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+
Accounting is a system of maintaining records of a company's operations and
communication that information to decision makers. - ANSWER: True
What makes accounting a valuable discipline? - ANSWER: Provides information to
make decisions
Financial accounting does not deal with which of the following? - ANSWER: Providing
information to internal users
Which of the following groups is not among the external users for whom financial
statements are prepared? - ANSWER: Managers
Product profitability reports for a business are considered - ANSWER: Managerial
accounting
Preparing a budget for a business is considered - ANSWER: Managerial accounting
(Budgets are internal documents and generally not shared outside of the
organization)
Which of the following would NOT be an objective of external users reading a
company's financial statements? - ANSWER: Assessing the company's contribution to
social politics.
What is the primary purpose of financial accounting? - ANSWER: Measure business
activities and communicate those measures to external users to make decisions.
When a company receives a product previously ordered, a recordable accounting
transaction has occurred - ANSWER: Yes (affects financial position and can be
measured in money)
When a company inquires about the availability of inventory, a transaction has
occurred - ANSWER: No
When payment is received for services not yet rendered, no entry is recorded until
that service has been rendered. - ANSWER: False (affects financial position since cash
is received)
Which of the following business events is not a transaction recorded in financial
accounting? - ANSWER: Signing an agreement with a supplier
, An alternative form of the accounting equation is: - ANSWER: Assets - Liabilities =
Stockholders' Equity
The resources of a company are referred to as: - ANSWER: Assets (assets benefit
future operations. Examples are cash, inventory, supplies, accounts receivable,
buildings and equipment.)
Liabilities can be best described as: - ANSWER: The amount owed to creditors
What is the best definition of an asset? - ANSWER: Resources that benefit future
operations
What is the best definition of an accounts receivable? - ANSWER: Amounts owed by
customers to a company.
Those who lend money or deliver goods and services before being paid are called -
ANSWER: Creditors (Assets = Liabilities( creditors' claims) + Equity (owners' claims))
If total assets increase $30,000 during a period and total liabilities increased $12,000
during the same period, the amount and direction (increase or decrease) of the
change in stockholders' equity for that period is: - ANSWER: an $18,000 increase.
assets = liabilities + equity
(+$30,000) - (+$12,000) = x
(+$30,000) - (+$12,000) = (+$18,000)
At the end of its year, J&L Services, Inc., a computer services business, had total
assets of $25,000 and equity of $10,000. How much were J&L Services' liabilities? -
ANSWER: $15,000
assets - equity = liabilities
$25,000 - $10,000 = $15,000
The amounts recorded when the company sells products or provided services to
customers are referred to as: - ANSWER: Revenues (revenues are recorded at the
time the company provides products or services to customers)
Which of the following best describes revenue? - ANSWER: Sales of goods and
services to a customer
The cost associated with producing revenues are referred to as: - ANSWER: Expenses
Dividends represent a return of the company's profit to its owners, the stockholders.
- ANSWER: True (not classified as an "expense")
Which of the following items is not a specific account in a company's accounting
records? - ANSWER: Income
